SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
[X] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as
permitted by Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional materials
[ ] Soliciting Material Pursuant to ss. 240.14a-ll(c) or
ss. 240.14a-12
IAI INVESTMENT FUNDS VI, INC.
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(Name of Registrant as Specified in its Charter)
Steven G. Lentz
Investment Advisers, Inc.
3700 First Bank Place
Minneapolis MN 55402
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-ll(c)(l)(ii), 14-(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rule 14-(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 *-/:
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(4) Proposed maximum aggregate value of transaction:
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*-/ Set forth the amount on which the filing fee is calculated and
state how it was determined.
(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-ll(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[Preliminary Copy]
IAI INVESTMENT FUNDS VI, INC.
3700 First Bank Place, P.O. Box 357
Minneapolis, Minnesota 55440-0357
(612) 376-2700; (800) 945-3863
NOTICE OF SPECIAL SHAREHOLDERS' MEETING: SEPTEMBER 12, 1996
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of IAI
Investment Funds VI, Inc., on behalf of its portfolio known as IAI Minnesota Tax
Free Fund (the "Fund"), will be held at the thirty-seventh floor of First Bank
Place, 601 Second Avenue South, Minneapolis, Minnesota, on September 12, 1996,
1996 at 10:00 a.m. Central Daylight Time, for the following purpose:
1. To consider and vote upon the liquidation and dissolution of the Fund
pursuant to the provisions of the Plan of Liquidation and Dissolution of the
Fund. A vote in favor of the Plan of Liquidation and Dissolution will be
considered a vote in favor of an amendment to the articles of incorporation of
IAI Investment Funds VI, Inc. required to effect the proposed liquidation and
dissolution.
2. To transact such other business as may properly come before the meeting
or any adjournments or postponements thereof.
Shareholders of record on August 26, 1996 are the only persons entitled to
notice of and to vote at the meeting. Your attention is directed to the attached
Proxy Statement. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE
FILL IN, SIGN, DATE, AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN
ORDER TO SAVE FURTHER SOLICITATION EXPENSE. There is enclosed with the proxy an
addressed envelope for which no postage is required.
Dated: _____________ , 1996 William C. Joas, Secretary
<PAGE>
[Preliminary Copy]
IAI INVESTMENT FUNDS VI, INC.
3700 First Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402
(612) 376-2700; (800) 945-3863
SPECIAL MEETING OF SHAREHOLDERS: SEPTEMBER 12, 1996
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of IAI Investment Funds VI, Inc. on behalf of its
portfolio known as IAI Minnesota Tax Free Fund (the "Fund"), of proxies to be
voted at a special meeting of shareholders of the Fund to be held September 12,
1996, and any adjournments thereof. The costs of solicitation, including the
cost of preparing and mailing the Notice of Meeting and this Proxy Statement,
will be paid by Investment Advisers, Inc., the Fund's investment adviser and
manager ("IAI"), and such mailing will take place on approximately _________,
1996. Additional solicitation may be made by letter, telephone or telegraph by
officers or employees of IAI. The address of IAI is that of the Fund as provided
above.
A proxy may be revoked before the meeting by giving written notice of
revocation in person or by mail to the Secretary of the Fund, by delivery of a
duly executed proxy bearing a later date or by attending and voting at the
Meeting. A quorum of shareholders is required to take action at the Meeting. Ten
percent of the shares entitled to vote at the Meeting, represented in person or
by proxy, will constitute a quorum of shareholders at the Meeting.
For purposes of determining the approval of the proposal being submitted to
shareholders for a vote, in instances where a choice is specified by the
shareholder in the proxy, those proxies will be voted in accordance with the
shareholder's choice. If no specification is made in the proxy, it will be voted
for approval of the liquidation and dissolution of the Fund. Abstentions will be
counted as present for purposes of determining whether a quorum of shares is
present at the meeting, but will be counted as a vote "against" the proposal to
liquidate and dissolve the Fund. Under the Rules of the New York Stock Exchange,
the proposal to liquidate and dissolve the Fund is considered a
"non-discretionary" proposal, which means that brokers who hold Fund shares in
street name for customers are not authorized to vote on such proposal on behalf
of their customers without specific voting instructions from such customers. If
a broker returns a "non-vote" proxy, indicating a lack of authority to vote on
the proposal, then the shares covered by such non-vote shall be deemed present
at the meeting for purposes of determining a quorum but shall not be deemed to
be represented at the meeting for purposes of calculating the vote with respect
to the proposal. So far as the Board of Directors of the Fund is aware, no
matters other than those described in this Proxy Statement will be acted upon at
the meeting. Should any other matters properly come before the meeting, it is
the intention of the persons named as proxies in the enclosed proxy to act upon
them according to their best judgment. In the event that sufficient proxy votes
in favor of the proposal to liquidate and dissolve the Fund are not received by
September 12, 1996, the persons named as proxies may propose one or more
adjournments of the meeting to permit further solicitation of proxies. Such
adjournments will require the affirmative vote of the holders of a majority of
the shares present in person or by proxy at the meeting. The persons named as
proxies will vote in favor of such adjournments if they are instructed by more
than a majority of the shares represented in person or by proxy to vote for the
liquidation proposal.
2
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Only shareholders of record on August 26, 1996, may vote at the meeting or
any adjournment thereof. As of that date, there were issued and outstanding
____________________ common shares, $.01 par value, of the Fund. Common shares
represent the only class of securities of the Fund. Each shareholder of the Fund
is entitled to one vote for each share held.
Under Minnesota law, none of the shareholders of the Fund will be entitled
to exercise any dissenters rights or appraisal rights with respect to the
liquidation and dissolution of the Fund.
The Fund's annual and semiannual reports for the fiscal year ended November
30, 1995 and the six months ended May 31, 1996, including financial statements,
were previously mailed to shareholders. If you have not received these reports
or would like to receive another copy of one or both reports, please contact the
Fund at 3700 First Bank Place, 601 Second Avenue South, Minneapolis, Minnesota
55402 or call 800-945-3863, and copies will be sent, without charge, by
first-class mail within three business days of your request.
SHARE OWNERSHIP
As of August 26, 1996, no Fund director owned shares of the Fund except
Noel P. Rahn. Mr. Rahn, who is also Chief Executive Officer of the Fund, owns
_________________ shares, or ___ % of the Fund's outstanding shares. As of that
same date, Fund directors and officers as a group own ______________ shares or
___ % of the Fund's outstanding shares. Due to ownership of more than 25% of the
Fund's outstanding shares, IAI's officers and directors may be said to control
the Fund. To the best knowledge of the Fund, no other person or entity
beneficially owns more than 5% of the Fund's outstanding shares except as set
forth below.
================================================================================
Name and Address Number of Percent of
of Shareholder Shares Class
================================================================================
[insert 5% shareholder information]
APPROVAL OF A PLAN OF LIQUIDATION AND DISSOLUTION
INTRODUCTION
At a meeting held on August 7, 1996, the Board of Directors considered and
approved IAI's recommendation that the Fund be liquidated and dissolved. The
Board also directed IAI to prepare a Plan of Liquidation and Dissolution of the
Fund ("Liquidation Plan") to be submitted for shareholder approval. A copy of
the Liquidation Plan is attached as Exhibit A to this Proxy Statement. A vote in
favor of the Liquidation Plan will be considered a vote in favor of an amendment
to the articles of incorporation of IAI Investment Funds VI, Inc. required to
effect the proposed liquidation and dissolution. A copy of this amendment to the
articles is included in Exhibit A to this Proxy Statement. If Fund shareholders
approve the Liquidation Plan, IAI will sell the Fund's portfolio securities and
other assets, pay creditors or establish reserves for such payments, and
distribute the net proceeds of such sales in cash, pro rata in accordance with
Fund holdings. The Board of Directors unanimously recommends that shareholders
vote FOR the Liquidation Plan.
3
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BACKGROUND
The Fund, whose address and phone number are listed on page one, is
represented by the Series D Common Shares of IAI Investment Funds VI, Inc., an
open-end diversified management investment company that is a Minnesota
corporation. The Fund commenced operations as "IAI Tax Free Fund" on April 6,
1992. The Fund's investment objective is to provide shareholders with as high a
level of current income exempt from federal income tax as is consistent with
preservation of capital. The Fund sought to achieve this objective by investing
primarily in investment grade municipal bonds. At the end of its first fiscal
year, the Fund had net assets of only $5 million. The Fund's small size
prevented IAI from effectively managing the Fund for two reasons. First, trade
execution was inefficient because the bid/ask spread on odd lot transactions is
significantly wider than for round lot transactions, whose normal trading unit
is $1 million. Second, municipal bond dealers were generally not interested in
covering small funds. In an effort to raise assets, in April 1993 IAI decided to
voluntarily waive all Fund expenses in excess of .25% of the Fund's average net
assets. Without such waiver the Fund would have had total expenses of .95% of
its average net assets. Unfortunately, the Fund still continued to have problems
attracting assets: at the end of its November 1994 fiscal period, the Fund had
only $6.9 million in net assets. Therefore, in Fall 1994 IAI recommended and the
Board unanimously approved a change in investment focus to allow the Fund to
pursue its objective by investing primarily in investment grade municipal bonds
issued by the State of Minnesota and its political or governmental subdivisions,
municipalities, governmental agencies or instrumentalities ("Minnesota
Obligations"). Consistent with this change in focus, the Board approved changing
the Fund's name to "IAI Minnesota Tax Free Fund". In December 1994, the Fund
formally completed its transition to this new focus.
After a year and a half of operation as a mutual fund investing primarily
in Minnesota Obligations, the Fund has failed to attract new assets and has
actually gotten smaller. As of May 31, 1996, the date of the Fund's most recent
semi-annual report, the Fund had $4.6 million in net assets. Given that both the
fee waiver and the change in investment focus have failed to overcome the Fund's
inability to attract assets, IAI has now concluded that the Fund should be shut
down. Another reason underlying IAI's conclusion is the generally stagnant
market for single-state tax exempt mutual funds. IAI believes it would be in the
best interests of Fund shareholders to invest in either a larger single-state
tax exempt fund or a larger national tax-exempt fund. Accordingly, IAI has
recommended liquidating the Fund's assets, distributing the proceeds to Fund
shareholders, and dissolving the Fund's legal structure.
At its August 7, 1996 meeting, the Fund's Board of Directors agreed with
IAI's recommendation. Accordingly, the Fund's Board of Directors, including all
of the Directors who are not "interested persons" of the Fund, as defined in the
Investment Company Act of 1940, unanimously adopted resolutions declaring that
the proposed liquidation and dissolution was in the best interests of the Fund
and its shareholders, approving the Liquidation Plan and amendment to the
articles proposed by IAI, and directing IAI to formally prepare such Liquidation
Plan and amendment and submit them for shareholder approval.
DESCRIPTION OF THE LIQUIDATION PLAN AND RELATED TRANSACTIONS
If the Liquidation Plan is approved by the Fund's shareholders, as of 3:00
p.m. Central time on the day of approval, the Fund will cease to carry on its
business and will proceed to sell all of its portfolio securities and other
assets for cash at one or more public or private sales and at such prices and on
such terms and conditions as IAI determines to be reasonable and in the best
interests of the Fund and its shareholders. IAI anticipates that the aggregate
of such prices, net of the Fund's liabilities, will approximate the Fund's net
asset value on such date, subject to market changes during the period in which
portfolio securities are sold. That same day, the Fund will file Articles of
4
<PAGE>
Amendment to its Amended and Restated Articles of Incorporation reflecting the
dissolution of the Fund with the Minnesota Secretary of State in accordance with
Minnesota law. The Fund then will apply its assets to the payment, satisfaction
and discharge of all existing debts and obligations of the Fund, and distribute
in one or more payments the remaining assets among the shareholders of the Fund,
with each shareholder receiving his or her proportionate share of each
liquidation distribution in cash. Upon such filing, the Fund will be statutorily
dissolved and will cease to exist, and no shareholder will have any interest
whatsoever in the Fund. IAI will bear the expenses of liquidation of the Fund
consistent with the terms of its Management Agreement with the Fund, which
provides that except for brokerage commissions and other expenditures in
connection with the purchase and sale of portfolio securities, interest expense,
and, subject to the specific approval of a majority of the disinterested
directors of a Fund, taxes and extraordinary expenses, IAI will pay all of the
Fund's costs and expenses.
If the Liquidation Plan is adopted, IAI currently estimates that the
liquidation distributions will be paid to shareholders during September 1996.
However, the exact date of the liquidation distributions will depend on the time
required to liquidate the Fund's assets. The Fund may, if deemed appropriate,
hold back sufficient assets to deal with any disputed claims or other contingent
liabilities which may then exist against the Fund. Any amount that is held back
relating to any such claim will be deducted pro rata from the net assets
distributable to shareholders and held until the claim is settled or otherwise
determined. IAI does not anticipate, however, that it will be necessary to hold
back any assets to deal with disputed claims or other contingent liabilities. In
the event that claims are not adequately provided for or are brought after
dissolution by previously unknown creditors or claimants, Fund directors and
officers could be held personally liable. In addition, claims possibly could be
pursued against shareholders to the extent of distributions received by them in
liquidation.
The Fund does not currently intend to create a trust to administer
liquidation distributions; however, in the event the Fund is unable to
distribute all of its assets pursuant to the Liquidation Plan because of its
inability to locate shareholders to whom liquidation distributions are payable,
the Fund may create a liquidating trust with a financial institution and deposit
any remaining assets of the Fund in such trust for the benefit of the
shareholders that cannot be located. The expenses of any such trust will be
charged against the liquidation distributions held therein.
As soon as practicable after the distribution of all of the Fund's assets
in complete liquidation, the officers of the Fund will close the books of the
Fund and prepare and file, in a timely manner, any and all required income tax
returns and other documents and instruments.
The Fund may elect not to declare the regular monthly distribution pending
the vote on the Plan in order to save the administrative costs that would be
associated with payment of such distribution. If the shareholder meeting is
adjourned, additional monthly distributions may also be suspended. Any amount
that would otherwise have been paid as a monthly distribution will be declared
as a distribution when the liquidation proceeds are paid to shareholders and
paid with the rest of the proceeds of liquidation.
Prior to completion of the liquidation, the Fund will send to its
shareholders of record a letter of transmittal form for the purpose of
exchanging each shareholder's Fund shares for liquidation distributions.
Shareholders whose shares are held in the name of their broker or other
financial institution will receive their distributions through their nominee
firms. No amount will be distributed by the Fund to a shareholder of record
unless and until such shareholder delivers to the Fund a signed letter of
transmittal form.
5
<PAGE>
FEDERAL INCOME TAX CONSEQUENCES
PAYMENT BY THE FUND OF LIQUIDATION DISTRIBUTIONS TO SHAREHOLDERS WILL BE A
TAXABLE EVENT. BECAUSE THE INCOME TAX CONSEQUENCES FOR A PARTICULAR SHAREHOLDER
MAY VARY DEPENDING ON INDIVIDUAL CIRCUMSTANCES, EACH SHAREHOLDER IS URGED TO
CONSULT HIS OR HER OWN TAX ADVISER CONCERNING THE FEDERAL, STATE AND LOCAL TAX
CONSEQUENCES OF RECEIPT OF A LIQUIDATING DISTRIBUTION.
The Fund currently qualifies, and intends to continue to qualify
through the end of the liquidation period, for treatment as a regulated
investment company under the Internal Revenue Code of 1986, as amended, so that
it will be relieved of federal income tax on any investment company taxable
income or net capital gain (the excess of net long-term capital gain over net
short-term capital loss) from the sale of its assets.
The payment of liquidation distributions will be a taxable event to
shareholders. Each shareholder will be viewed as having sold his or her Fund
shares for an amount equal to the liquidation distribution(s) he or she
receives. Each shareholder will recognize gain or loss in an amount equal to the
difference between (a) the shareholder's adjusted basis in the Fund shares, and
(b) such liquidation distribution(s). The gain or loss will be capital gain or
loss to the shareholder if the Fund shares were capital assets in the
shareholder's hands and generally will be long-term if the Fund shares were held
for more than one year before the liquidation distribution is received.
As of _______________, 1996, the Fund had $_____________ in net capital
loss carryforwards and current capital losses that could be used to offset
current or future capital gains. The Fund had $_____________ in unrealized
capital gains as of the same date. If the liquidation and dissolution of the
Fund is approved and all or a portion of such capital gains or any additional
capital gains are realized, the Fund will be able to use a portion of its net
capital loss carryforwards to offset such gains. Any remaining capital loss
carryforwards that are not used to offset capital gains realized upon
liquidation will be lost, and the benefit of such capital loss carryforwards
will not pass through to shareholders. If the Fund did not liquidate, it is
possible that sufficient capital gains could be generated in the future to use
the entire amount of the Fund's capital loss carryforwards.
The Fund generally will be required to withhold tax at the rate of 31% with
respect to any liquidation distribution paid to individuals and certain other
non-corporate shareholders who fail to certify to the Fund that their social
security number or taxpayer identification number provided to the Fund is
correct and that the shareholder is not subject to backup withholding.
The foregoing summary is generally limited to the material federal income
tax consequences to shareholders who are individual United States citizens and
who hold shares as capital assets. It does not address the federal income tax
consequences to shareholders who are corporations, trusts, estates, tax-exempt
organizations or non-resident aliens. This summary does not address state or
local tax consequences. Shareholders are urged to consult their own tax advisers
to determine the extent of the federal income tax liability they would incur as
a result of receiving a liquidation distribution, as well as any tax
consequences under any applicable state, local or foreign laws.
6
<PAGE>
FINANCIAL HIGHLIGHTS
The following financial highlights for the Fund (other than for the six
months ended May 31, 1996) have been audited by KPMG Peat Marwick LLP,
independent auditors, whose report thereon appears in the Fund's annual report
to shareholders for the year ended November 30, 1995. Representatives of KPMG
Peat Marwick LLP are expected to be present at the meeting and available to
respond to appropriate questions, and they will have the opportunity to make a
statement if they desire to do so. Financial statements for the year ended
November 30, 1995 and the six months ended May 31, 1996 are contained in the
Fund's audited annual and unaudited semiannual reports to shareholders for such
periods.
<TABLE>
<CAPTION>
Six Months Period
Ended from Year Period from
5/31/96 Year Ended 4/1/94+ to Ended 4/6/92***
Per-Share Data (unaudited) 11/30/95 11/30/94 3/31/94 to 3/31/94
- -------------- ----------- -------- -------- ------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period $10.24 $9.53 $10.27 $10.67 $10.00
------- ----- ------ ------ ------
Operations:
Net investment income .27 .52 .39 .58 .41
Net realized and unrealized gains
(losses) on investments (.32) .71 (.69) (.35) .67
----- ---- ----- ----- ----
Total from operations (.05) 1.23 (.30) .23 1.08
----- ---- ----- ----- ----
Distribution to shareholders from:
Net investment income (.27) (.52) (.39) (.56) (.41)
Net realized gains ---- ---- (.05) (.07) ----
---- ---- ----- ----- ----
Total distributions to shareholders (.27) (.52) (.44) (.63) (.41)
---- ---- ----- ----- -----
Net asset value:
End of period $9.92 $10.24 $9.53 $10.27 $10.67
===== ====== ===== ====== ======
Total investment return* (.48%) 13.17% (3.10%) 1.89% 11.00%
Net assets at end of period
(000's omitted) $4,577 $6,630 $6,942 $7,738 $5,045
Ratios:
Expenses to average net assets**** .25%** .25% .25%** .25% .95%**
Net investment income to average 4.36%**
net assets**** 5.19%** 5.15% 5.76%** 5.28%
Portfolio turnover rate
(excluding short-term securities) 29.5% 94.0% 57.8% 16.0% 4.8%
- ---------------------------------------------
</TABLE>
7
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* Total investment return is based on the change in net asset value of a
share and assumes reinvestment of distributions at net asset value.
** Annualized
*** Commencement of operations
**** In accordance with a new management agreement effective April 1, 1996,
these ratios are based on average daily net assets rather than average
month-end net assets. Prior period ratios have not been adjusted.
The Fund's adviser voluntarily waived $20,333, $49,686, $35,252
and $53,108 in expenses for the period ended May 31, 1996, the year
ended November 30, 1995, the period ended November 30, 1994, and the
year ended March 31, 1994, respectively. If the Fund had been charged
for these expenses, the ratio of expenses to average net assets would
have been .95%, .95%, .95% and .95%, respectively, and the ratio of net
investment income to average net assets would have been 4.40%, 4.45%,
5.06% and 4.58%, respectively.
+ Reflects fiscal year-end change from March 31 to November 30.
REQUIRED VOTE
The affirmative vote of a majority of the Fund's shares entitled to vote at
the meeting is required to approve the Liquidation Plan and amendment to the
articles. THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR APPROVAL
OF THE LIQUIDATION PLAN AND AMENDMENT.
William C. Joas
Secretary
Dated: ___________, 1996
8
<PAGE>
EXHIBIT A
PLAN OF LIQUIDATION AND DISSOLUTION
OF IAI MINNESOTA TAX FREE FUND
(a) As of 3:00 p.m. of the date of approval of this Plan of Liquidation and
Dissolution by the shareholders of IAI Minnesota Tax Free Fund, represented by
the Series D Common Stock of IAI Investment Funds VI, Inc. (the "Fund"), the
Fund will cease to carry on its business. As soon thereafter as possible, the
proper officers of the Fund shall perform such acts, execute and deliver such
documents, and do all things as may be reasonably necessary or advisable to
complete the liquidation and dissolution of the Fund, including, but not limited
to, the following: (i) sell all of the portfolio securities and any and all
other property and assets of the Fund for cash at one or more public or private
sales and at such prices and on such terms and conditions as such officers shall
determine to be reasonable and in the best interests of the Fund and its
shareholders; (ii) to the extent possible, prosecute, settle or compromise all
claims or actions of the Fund or to which the Fund is subject; (iii) file Form
966 with the Internal Revenue Service, together with certified copies of the
directors' and shareholders' resolutions approving this Plan; and (iv) execute
in the name and on behalf of the Fund those contracts of sale, deeds,
assignments, notices and other documents as in the judgment of such officers may
be necessary, desirable or convenient in connection with the carrying out of the
liquidation and dissolution of the Fund. (All references in this Plan of
Liquidation and Dissolution to the "proper officers of the Fund" shall include,
where appropriate, proper officers of the Fund's investment adviser, acting on
behalf of the Fund.)
(b) The proper officers of the Fund then shall apply the assets of the Fund
to the payment, satisfaction and discharge of all existing debts and obligations
of the Fund and distribute in one or more payments the remaining assets among
the shareholders of the Fund, with each shareholder receiving his or her
proportionate share of each payment. All expenses of the liquidation and
dissolution of the Fund, except for brokerage commissions and other expenditures
in connection with the purchase and sale of portfolio securities, interest
expense, and, subject to the specific approval of a majority of the
disinterested directors of a Fund, taxes and extraordinary expenses, if any,
will be borne by Investment Advisers, Inc.
(c) The proper officers of the Fund may, if such officers deem it
appropriate, establish a reserve to meet any contingent liabilities of the Fund,
including any claims or actions to which the Fund is subject, and any amount
that is placed in such reserve shall be deducted from the net assets
distributable to shareholders until the contingent liabilities have been settled
or otherwise determined and discharged.
(d) In the event the Fund is unable to distribute all of the net assets
distributable to shareholders because of the inability to locate shareholders to
whom liquidation distributions are payable, the proper officers of the Fund may
create in the name and on behalf of the Fund a liquidation trust with a
financial institution and, subject to applicable abandoned property laws,
deposit any remaining assets of the Fund in such trust for the benefit of the
shareholders that cannot be located. The expenses of any such trust shall be
charged against the assets held therein.
(e) On the date of approval of this Plan of Liquidation and Dissolution by
Fund shareholders, the proper officers of the Fund shall file Articles of
Amendment to the Amended and Restated Articles of Incorporation, in the form
attached hereto, reflecting the dissolution of the Fund with the Secretary of
State of the State of Minnesota in accordance with Minnesota law.
<PAGE>
ATTACHMENT TO PLAN OF LIQUIDATION AND DISSOLUTION
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
IAI INVESTMENT FUNDS VI, INC.
The undersigned officer of IAI Investment Funds VI, Inc. (the
"Corporation"), a corporation subject to the provisions of Chapter 302A of the
Minnesota Statutes, hereby certifies that the Corporation's Board of Directors
and shareholders, at meetings held August 7, 1996 and September __ , 1996,
respectively, adopted the resolutions hereinafter set forth; and such officer
further certifies that the amendments to the Corporation's Amended and Restated
Articles of Incorporation set forth in such resolutions were adopted pursuant to
said Chapter 302A.
WHEREAS, the Corporation is registered as an open-end management
investment company (i.e., a mutual fund) under the Investment Company Act of
1940 and offers its shares to the public in several series, each of which
represents a separate and distinct portfolio of assets; and
WHEREAS, it is desirable and in the best interests of the holders of
the Series D shares of the Corporation (also known as the "IAI Minnesota Tax
Free Fund") that the assets belonging to such series be liquidated; and
WHEREAS, the Corporation wishes to provide for the pro rata
distribution of the proceeds of such liquidation received by it to holders of
shares of the Corporation's IAI Minnesota Tax Free Fund and the simultaneous
cancellation and retirement of the outstanding shares of the Corporation's IAI
Minnesota Tax Free Fund; and
WHEREAS, the Corporation has approved a Plan of Liquidation and Dissolution
providing for the foregoing transactions; and
WHEREAS, the Plan of Liquidation and Dissolution requires that, in
order to bind all holders of shares of the Corporation's IAI Minnesota Tax Free
Fund to the foregoing transactions, and in particular to bind such holders to
the cancellation and retirement of the outstanding shares of the Corporation's
IAI Minnesota Tax Free Fund, it is necessary to adopt an amendment to the
Corporation's Amended and Restated Articles of Incorporation.
NOW, THEREFORE, BE IT RESOLVED, that Section 5(a) of the Corporation's
Amended and Restated Articles of Incorporation be, and the same hereby is,
amended as set forth below.
5. (a) Ten billion (10,000,000,000) of the Shares may be issued by the
Corporation in a series designated "Series A Common Shares," ten billion
(10,000,000,000) of the Shares may be issued by the Corporation in a series
designated "Series B Common Shares," ten billion (10,000,000,000) of the Shares
may be issued by the Corporation in a series designated "Series C Common
Shares," ten billion (10,000,000,000) of the Shares may be issued by the
Corporation in a series designated "Series E Common Shares," ten billion
(10,000,000,000) of the Shares may be issued by the Corporation in a series
designated "Series F Common Shares," and ten billion (10,000,000,000) of the
Shares may be issued by the Corporation in a series designated "Series G Common
Shares." The remaining 9,940,000,000,000 Shares authorized by this Article 5
shall initially be undesignated Shares (the
<PAGE>
"Undesignated Shares"). Any series of the Shares shall be referred to herein
individually as a "Series" and collectively herein, together with any further
series from time to time created by the Board of Directors, as "Series." The
Undesignated Shares may be issued in such Series with such designations,
preferences and relative, participating, optional or other special rights, or
qualifications, limitations or restrictions thereof, as shall be stated or
expressed in a resolution or resolutions providing for the issue of any Series
as may be adopted from time to time by the Board of Directors of the Corporation
pursuant to the authority hereby vested in the Board of Directors. Each Series
of Shares which the Board of Directors may establish, as provided herein, may
evidence, if the Board of Directors shall so determine by resolution, an
interest in a separate and distinct portion of the Corporation's assets, which
shall take the form of a separate portfolio of investment securities, cash and
other assets. Authority to establish such separate portfolios is hereby vested
in the Board of Directors of the Corporation, and such separate portfolios may
be established by the Board of Directors without the authorization or approval
of the holders of any Series of Shares of the Corporation. Such investment
portfolios in which Shares of the Series represent interests are also
hereinafter referred to as "Series".
(1) As of 3:00 p.m. Central time on the date upon which these Articles
of Amendment are filed with the Minnesota Secretary of State, the assets
belonging to such shares, and the Special Liabilities, General Assets and
General Liabilities associated with such assets, shall be sold. For purposes of
the foregoing, "assets belonging to", "Special Liabilities", "General Assets"
and "General Liabilities" have the meanings set forth in Article 7(b), (c) and
(d) of the Corporation's Amended and Restated Articles of Incorporation.
(2) All issued and outstanding Series D Common Shares shall
simultaneously be canceled on the books of the Series and retired. From and
after this time, the Series D Common Shares canceled and retired pursuant to
paragraph 5(a)(1) above shall have the status of authorized and unissued Series
D Common Shares of the Corporation, without designation as to class.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has
executed these Articles of Amendment on behalf of the Corporation on September
___, 1996.
IAI INVESTMENT FUNDS VI, INC.
By _____________________________
Secretary
<PAGE>
PROXY
IAI MINNESOTA TAX FREE FUND
(a series of IAI Investment Funds VI, Inc.)
3700 First Bank Place, P.O. Box 357
Minneapolis, Minnesota 55440-0357
(612) 376-2700; (800) 945-3863
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF IAI
INVESTMENT FUNDS VI, INC. (the "Corporation").
The undersigned hereby appoints Richard E. Struthers, Susan J. Haedt and
William C. Joas, and each of them, with power to act without the other and with
the right of substitution in each, as proxies of the undersigned and hereby
authorizes each of them to represent and to vote, as designated below, all the
shares of the common stock of IAI Minnesota Tax Free Fund (the "Fund"), held of
record by the undersigned on August 26, 1996, at a special meeting of the Fund's
shareholders to be held on September 12, 1996 or any adjournments or
postponements thereof, with all powers the undersigned would possess if present
in person. All previous proxies given with respect to the meeting hereby are
revoked.
THE PROXIES ARE INSTRUCTED TO VOTE AS FOLLOWS:
1. APPROVAL OF PLAN OF LIQUIDATION AND DISSOLUTION AND RELATED ARTICLES
OF AMENDMENT
[_] FOR [_] AGAINST [_] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL
BE VOTED "FOR" THE ABOVE PROPOSAL. RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS AND THE PROXY STATEMENT RELATING TO THE MEETING IS ACKNOWLEDGED BY
YOUR EXECUTION OF THIS PROXY.
PLEASE SIGN THIS PROXY EXACTLY AS YOUR NAME APPEARS BELOW. WHEN SHARES ARE
HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED
OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP NAME BY PARTNER OR OTHER
AUTHORIZED PERSON.
DATED: _____________________, 1996
--------------------------------------------------
Signature
[SHAREHOLDER INFORMATION]
--------------------------------------------------
Signature if held jointly
TO SAVE FURTHER SOLICITATION EXPENSE, PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY PROMPTLY USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
